CA Democrats Pushing to Give Illegal Adults Full Health Care Benefits

MedizinCalifornia Democrats are reportedly pushing to give full healthcare benefits to illegal immigrant adults, which would mean that the Golden State not only may have to raise taxes but will also be a magnet for even more illegal immigrants.

According to a Monday Politico report, state Senator Ricardo Lara (D-Bell Gardens) is leading the charge by reportedly arguing that “California needs to be a laboratory for social change by taking the lead on progressive causes.”

“We are trying to address the fact that, whether you like it or not, our undocumented community needs the care, and we are paying for it anyway,” he reportedly said.

Politico points out that California Democrats are trying to extend the state’s Medi-Cal program this legislative session to nearly 1.2 million illegal immigrant adults who would qualify for it, and “companion bills in the state Assembly and Senate” have already “passed their respective health committees with party-line votes.”

The cost to expand Medicaid coverage to adult illegal immigrants in California is reportedly projected to cost $3 billion annually.

California Governor Jerry Brown, who extended Medi-Cal coverage to illegal immigrant children in 2015, has not commented on the pending measures but “is required by law to sign or veto bills passed this session by Sept. 30, just five weeks before the midterm elections.”

Political and health analysts are reportedly astounded that Democrats are trying to extend healthcare benefits to illegal immigrants before this year’s important midterm elections, reportedly saying that the measure would give Republicans in California relevance “they would never have before” in an election cycle in which House races in California could decide which party controls Congress.

Paul Ginsburg, director of the USC-Brookings Schaeffer Initiative for Health Policy, told Politico that the proposal would be “fiscally very dangerous” and  Jay Bhattacharya, a Stanford physician and health economist, suggested to the outlet that such a plan would have to be paid for with tax increases.

Bhattacharya also pointed out the obvious—giving full healthcare coverage to illegal immigrant adults will make California, which is already an official “sanctuary” state, even a greater magnet for illegal immigrants.

The illegal immigrant who murdered Kate Steinle, for instance, told authorities that he came to San Francisco after being previously deported five times because he knew San Francisco was proudly a “sanctuary city.”

“If you make a program like this available, undocumented workers in other states might be attracted to California because of this,” Bhattacharya, the Stanford physician, reportedly said.

This article was originally published by Breitbart.com/California

Assembly wants to spend $1 billion on health coverage for illegal immigrants

California, flush with cash from an expanding economy, would eventually spend $1 billion a year to provide health care to immigrants living in the state illegally under a proposal announced Wednesday by Democratic lawmakers.

The proposal would eliminate legal residency requirements in California’s Medicaid program, known as Medi-Cal, as the state has already done for young people up to age 19.

It’s part of $4.3 billion in new spending proposed by Assemblyman Phil Ting, a San Francisco Democrat who leads the budget committee. Assembly Democrats also want to expand a tax credit for the working poor, boost preschool and child care, and increase college scholarships to reduce reliance on student loans.

They also would commit $3.2 billion more than required to state budget reserves. …

Click here to read the full article from the Sacramento Bee

Prop. 52: California Voters Approve Limitations on the Use of State Fees Paid by Hospitals

NHS-nurse-hospital_2519626bProposition 52 was adopted by the voters on Nov. 8 to protect quality assurance fees paid by hospitals to capture more federal Medi-Cal dollars. Prop. 52 is an initiative statutory and constitutional amendment which increases the required vote threshold from majority to two-thirds for the Legislature to amend existing law that imposes these fees on hospitals for the purpose of obtaining federal Medi-Cal matching funds and that directs those fees and federal matching funds to hospital-provided Medi-Cal health care services.

The ballot measure’s proponents call it the Medi-Cal Funding and Accountability Act. Prop. 52 also eliminates existing law’s sunset date and declares that law’s fee proceeds shall not be considered revenues for purposes of applying the state’s spending limit or determining required education funding in accordance with current state law.

According to a fiscal estimate prepared by the Legislative Analyst and Director of Finance, the enactment of Prop. 52 will result in “state savings from increased revenues that offset state costs for children’s health coverage of around $500 million beginning in 2016-17 (half-year savings) to over $1 billion annually by 2019-20, likely growing between 5 percent to 10 percent annually thereafter.

“Increased revenues to support state and local public hospitals of around $90 million beginning in 2016-17 (half-year) to $250 million annually by 2019-20, likely growing between 5 percent to 10 percent annually thereafter.” To put these amounts in perspective, several years ago while the state was in a financially dire position, $260 million was diverted to general fund uses.

According to the official ballot arguments, a YES vote on this measure meant: “An existing charge imposed on most private hospitals that is scheduled to end on January 1, 2018 under current law would be extended permanently. It would be harder for the Legislature to make changes to it. Revenue raised would be used to create state savings, increase payments for hospital services to low-income Californians, and provide grants to public hospitals.”

According to the proponents of Proposition 52, the measure extends the current state Medi-Cal hospital fee program which generates over $3 billion a year in federal matching funds that pay for health care services for children, seniors and low-income families. Proposition 52 prohibits the Legislature from diverting this money for other purposes without voter approval.

On the other hand, also based upon the official ballot arguments, a NO vote on this measure meant: “An existing charge imposed on most private hospitals would end on January 1, 2018 unless additional action by the Legislature extended it. Removes all accountability and oversight of over $3 billion of taxpayer dollars. Gives $3 billion to hospital CEOs with no independent audit and no requirement the money is spent on health care. Public funds can be spent on lobbyists, perks and salaries for hospital bureaucrats instead of children and seniors.”

By way of background provided by the independent Legislative Analyst Office, the Medi‐Cal program provides health care benefits to low‐income Californians who meet certain eligibility requirements. These health care benefits include services such as primary care visits, emergency room visits, surgery and prescription drugs. Currently, Medi‐Cal provides health care benefits to over 13 million Californians. Total spending on Medi‐Cal in 2015‐16 was roughly $95 billion, of which about $23 billion was from the state’s General Fund.

The cost of the Medi-Cal program is shared between the state and federal governments. Public and private hospitals provide care to people enrolled in Medi-Cal. There is a quality assurance fee (QAF) that the state has imposed upon most private hospitals. It has been collected since 2009. The QAF has generated about $18 billion in federal funds since that time and has benefited more than 7 million children and 1.6 million seniors, according to the proponents of Prop. 52.

According to the LAO, the hospital QAF results in a net benefit to the hospital industry and monies from the QAF result in state savings. The Legislature and federal government have previously approved extending the QAF. Under Prop. 52, the hospital QAF has been made permanent and the State will be limited in its ability to either change or end the QAF. This change will also eliminate the uncertainty whether the program will continue.

Prop. 52 includes the following Statement of Findings:

“A. The federal government established the Medicaid program to help pay for health care services provided to low-income patients, including the elderly, persons with disabilities, and children. In California this program is called Medi-Cal. In order for any state to receive federal Medicaid funds, the state has to contribute a matching amount of its own money.

“B. In 2009, a new program was created whereby California hospitals began paying a fee to help the state obtain available federal Medicaid funds at no cost to California taxpayers. This program has helped pay for health care for low-income children and resulted in California hospitals receiving approximately $2 billion per year in additional federal money to help hospitals to meet the needs of Medi-Cal patients.”

In addition, the measure contains the following Statement of Purpose: “To ensure that the fee paid by hospitals to the state for the purpose of maximizing the available federal matching funds is used for the intended purpose, the people hereby amend the Constitution to require voter approval of changes to the hospital fee program to ensure that the state uses these funds for the intended purpose of supporting hospital care to Medi-Cal patients and to help pay for health care for low-income children.”

As a constitutional amendment, Prop. 52 classifies the revenue generated under this ballot measure as a trust fund. Moreover, these fee proceeds are exempt from the minimum school funding guarantee law (Prop. 98). These trust fund revenues can be used to offset state costs. The purpose is to protect the funds and ensure they are properly spent for their intended purpose.

There are instances in which the hospital QAF can become inoperative, such as where the federal government denies approval of the matching funds or the relevant federal agency (CMS) decides that the QAF cannot be implemented. The state may have to make certain modifications to the QAF program to comply with relevant changes to federal law.

As a result of the enactment of Prop. 52, the hospital QAF will be made permanent (unless the federal government eliminates the matching program) and it will be difficult, even in tough budget times, for the Legislature and governor to swipe these fees, the obvious intent of the ballot measure’s proponents. Time will tell whether the opponents’ claims of no oversight will be accurate. In the meantime, the hospital QAF will continue while the federal funding program is available.

Chris Micheli is an attorney and legislative advocate with the Sacramento governmental relations firm of Aprea & Micheli. 

A Quick Guide to the 17 State-Wide Ballot Measures

VotedI know what you’re thinking as you look at the 224-page voter guide to 17 statewide ballot propositions, and it’s not printable in a family newspaper.

Still, with California effectively under one-party rule, you and the ballot initiative are the closest thing we have to a system of checks and balances. So here’s my personal guide to help you do the job.

Yes on Proposition 54 to require that bills in the Legislature be posted online in their final form for 72 hours before lawmakers vote on them. This ends the abusive practice of slamming backroom deals into unrelated or blank bills as an “amendment,” then rushing them to the floor for a vote before anybody else can read them.

Yes on Prop. 53 to require voter approval before the state can borrow $2 billion or more for state projects by issuing revenue bonds. This affects the proposed Delta tunnels water project. Revenue bonds are repaid by charging the users of whatever they’re issued to build. If you use water, that’s you.

Yes on Prop. 52 to protect a program devised by California hospitals to secure available federal matching dollars for Medi-Cal. The hospitals pay the state to help fund Medi-Cal, which then qualifies for matching funds, and then the hospitals get most of their money back. The “most” part is the problem. Vote yes on 52 to keep politicians’ hands out of the Medi-Cal cookie jar.

On the rest, I’m voting no.

Taxes and education: Prop. 55 extends a temporary income-tax hike on high-earners until 2030, but the school budget crisis is over, and a top state tax rate of 13.3 percent makes California uncompetitive with other states for the small businesses that create most of the jobs in America. Prop. 51 soaks taxpayers for $9 billion plus interest to build schools so new-home developers can escape higher fees. Prop. 58 repeals the 1998 “English for the Children” initiative and reinstates bilingual education, and it could lead to some students being automatically enrolled in bilingual classes even if parents don’t request it or want it.

Criminal justice: Prop. 57 empowers state prison officials and parole boards to release many state inmates early, regardless of enhanced sentences. Prop. 62 abolishes the death penalty. Prop. 66 changes death penalty procedures to limit and speed up state appeals.

Substances and drugs: Prop. 56 puts a $2 tax on cigarettes and extends tobacco taxes to vaping products. Prop. 64 legalizes recreational marijuana, but it also launches a massive new state bureaucracy to regulate, track and tax every plant from seed to sale, and it’s still illegal under federal law. Prop. 61 orders some state agencies to pay no more for prescription drugs than the price paid by the U.S. Department of Veterans Affairs, likely leading to pre-discount price hikes. …

Click here to read the full article from the L.A. Daily News.

Obamacare Sinking Under Weight of Math

Healthcare costsThe Affordable Care Act is collapsing, and President Obama blames Republicans.

Writing in the Journal of the American Medical Association, the president accused Republicans of undermining the health care law’s implementation. “It has come at a cost for the country,” Obama wrote, “most notably for the estimated 4 million Americans left uninsured because they live in GOP-led states that have yet to expand Medicaid.”

But expanding Medicaid also has come at a cost.

Medi-Cal, as Medicaid is called in California, has enrolled almost 5 million people since January 2014, when the Affordable Care Act expanded eligibility for the safety-net program. In 2010, 7.4 million Californians were covered by Medi-Cal. Today it’s more than 13 million, about one-third of the state population.

Covered California, the health care exchange where federally subsidized policies can be purchased from private insurers, has enrolled just 1.4 million people since it went online in the fall of 2013.

Is the dramatic expansion of Medi-Cal a success story?

Not if you run a hospital. California pays Medi-Cal providers less than it costs to provide the care to patients. The more people they treat, the more money they lose.

In 2009, hospitals in California were losing a total of about $2 billion annually on the care they provided to Medi-Cal patients. Today it’s about $8 billion.

The federal government provides matching funds for state Medicaid programs. To help California bring home every available federal dollar, the hospitals came up with the idea of paying a fee to the state, which would be put into the Medi-Cal program to help it qualify for matching funds. Then the state would have more money and could pay the hospitals for providing care to Medi-Cal patients.

It may sound like a game of three-card monte, but the California Hospital Association says the program has helped hospitals lose only $5 billion on Medi-Cal patients instead of $8 billion.

The hospital fee program was written into state law in 2009 and renewed three more times, most recently in 2013. It was well-supported but still bumpy: The state took a $1 billion annual cut of the hospital fees to pay for children’s health programs, and occasionally some of the hospital fees were diverted to other budget priorities.

So the hospitals are asking the voters of California to lock the hospital fee program into the law permanently. It will be on the Nov. 8 statewide ballot as Proposition 52, the Medi-Cal Funding and Accountability Act.

The measure has the endorsement of …

Click here to read the full article

Tobacco Tax – Conflicting Goals of Prop. 56

cigarette smoking ashesWhat is the tobacco tax increase for? Is the tax proposed in Proposition 56 to reduce smoking or to gain revenue? It seems the proponents’ goal is to be all things — a deterrent to smoking by raising the cost, plus raising revenue mostly for health care. Can they really have it both ways?

Raising the cost of a product means you will get less of it. The idea behind raising the cost of cigarettes and other tobacco products is to diminish and even eliminate their use. Previous tobacco tax increases have been accompanied by reduced use.

In a new study by the Proposition 56 campaign aimed at convincing the business community of the measure’s positive economic impacts, additional costs for a single smoking employee in health care costs and reduced productivity is calculated to be more than $5,000 per year.

The study also notes that, “From an employer ’s perspective, money spent on Medi-Cal is a good investment.”

About a billion dollars raised by the new tax would be dedicated to Medi-Cal. The idea is for an on-going financial commitment to the Medi-Cal program that has seen a dramatically increased population in recent years–and not just because of smokers. California has one the smallest percentage of smokers of any state.

The study briefly remarks on the loss of business for retailers who carry tobacco products asserting that the net benefit of eliminating “all” smokers would outweigh the costs involved from lost revenue of private sector retailers and lost government revenue. In this context, can we call eliminating all smokers a pipe dream?

If cessation of smoking is the prime goal, with all the economic benefits that the study says comes with the end of smoking, why not raise the tax instead of $2 a pack to $20 or more. That should discourage smokers.

But then all the revenue will disappear as well.

How important is the revenue goal of Proposition 56? If revenue diminishes with the decrease in smoking won’t those who benefit from the government dollars look for a replacement? In fact, Proposition 56 calls on the state Controller to transfer some of the new money to programs already benefiting from previous tobacco tax increases to make up the expected revenue loss if this measure passes. It stands to reason that those benefiting from the revenue haul from an increased tax will not want it to disappear.

There’s an example of such logic on the same ballot. California voters will decide on Proposition 55 to continue what was supposed to be a temporary tax.

Hospitals and health care union members are taking a two-prong approach to fund Medi-Cal. Go after dollars from the rich with Proposition 55’s extension of the income tax, and capture money from the poor who tend to make up the bulk of smokers with Proposition 56’s tobacco tax increase.

So, what is the intention of Proposition 56 — is it designed to discourage and ultimately stop smoking, or is it to raise revenue?

This piece was originally published by Fox and Hounds Daily

“Honeymoon” Period is Over For Government Run Health Care

The announcement yesterday by Covered California that the statewide premium increase for Obamacare will be 13.2%, up from approximately four percent in each of the last two years, signals that the “honeymoon” period is over for government run health care in California and elsewhere.

The State of California and its taxpayers needs to brace itself for another major threat to its long-term fiscal sustainability because things could get ugly pretty quickly depending on many variables that determine California’s extraordinary level of government run health care spending.

The precise impact of the fiscal hit posed by the premium increases is difficult to pinpoint at this early stage, but there is no question that the state’s exposure to significant increases in Obamacare-driven health care expenditures will increase dramatically over the next few years.

Total costs for Obamacare in California are staggering, which means that any tweak to the program by the federal government could immediately expose the state to billions, or even tens of billions of dollars in increased costs unless corrective action is taken.

This fact is particularly troubling given the extremely poor track record of the California Democrat Legislature in being proactive on fiscal issues such as the state budget and the pension issue.

For example, Republican Presidential nominee Donald Trump says he plans to completely repeal Obamacare, which would blow a hole in California’s budget of tens of billions of dollars, unless coverage is dropped for millions of Medi-Cal recipients.

A few sets of summary figures paint a good picture the state’s total exposure in the event that federal government shifts more responsibility for the financing of Obamacare to the states, or decides to pull back all together.

According to the state’s approved 2016-17 budget, total state spending for Health and Human Services totaled $54 billion for 2016-17, which even now surpasses K-12 Education as the biggest category of state spending, which received $51.5 billion in 2016-17.

California State spending for Health and Human Services, primarily Medi-Cal, has increased by 46% since 2011-12, jumping from only $37 billion in 2011-12 to the $54 billion for 2016-17 noted above.

But if you add federal spending to the equation, the California Department of Health Care Services received a total $93 billion in 2016-17, nearly double the $47 billion received in 2011-12, according to the California Department of Finance.

The state’s Medi-Cal caseload has exploded in the past few years, increasing from 8 million in 2012-13 to a projected 14 million in 2016-17, covering over a third of the state’s population, according to the Governor’s May Revise.

For 2016-17 the state’s share of the Medi-Cal expansion under Obamacare is $16.2 billion ($819.5 million General Fund).  But this only assumes a 5% share of the cost for the State of California.  By 2020-21, the state share will double to 10%, while the federal government is supposed to continue to pick up 90% of the costs.

I don’t believe it’s reasonable to assume that these formulas will stay so one-sided for long, particularly in light of increased premium pressures as well as fiscal pressures on the federal budget.

Absent changes to current federal and state law, my preliminary analysis suggests that the state’s annual cost increases related to Obamacare could easily reach into the billions of dollars per year in the very near future, and significantly higher if the federal government decides to further shift its costs to the states, which is inevitable.

Future double-digit annual premium increases will only serve to exacerbate state costs and encourage more cost shifting by the federal government.

It is important to note that health care premium inflation is not something that will subside anytime soon, and the trend is only likely to increase for the foreseeable future.

The low-premium increases over the last two years of 4%, was a complete anomaly based on the historical 20-year averages.

Public agencies in California commonly assume an average of 10% annual increases in employer health care premiums.  According to the California Health Care Foundation, individual premium increases rose by 15% in 2014, 9% in 2013, 8.2% in 2012, and 10% in 2011—roughly an average of 8.75% per year.

“The key drivers of health care premium increases are advances in medical technology and subsequent increases in utilization, excel price inflation for medical services, cost-shifting, the high cost of regulatory compliance, and patient lifestyles (e.g. physical inactivity and increases in obesity),” according to a study by the Wellpoint Institute of Health Care Knowledge.

To sum up, the federal government’s future commitment to Obamacare financing is shaky at best, and any major changes could spell financial catastrophe for the State of California unless bold political leadership is exercised in Sacramento—something that has been in extremely short supply on the Democratic side of the aisle in Sacramento for quite some time.

David Kersten is executive director of the Kersten Institute for Governance and Public Policy (www.kersteninsitute.org) . He is an expert on fiscal issues and teaches a masters’ course on public budgeting for the University of San Francisco. 

Hospitals Spending Millions to Inflict More Pain On Taxpayers

NHS-nurse-hospital_2519626bIn 2012, those of us who opposed Proposition 30 were told that the measure, which was the largest state tax hike in American history, was just a “temporary” fix to address the emergency of a severe budget shortfall. But just as Milton Friedman noted that “nothing is so permanent as a temporary government measure,” here in California it appears that nothing is so permanent as a temporary tax increase.

However, in their journey to extend the Prop. 30 tax hikes, the tax raisers started tripping over their own greed. Even the public sector union bosses weren’t reading off the same page and different proposals began to emerge, each targeting billions of dollars of tax revenue to their respective constituencies. And compounding the problem was the fact that the “emergency,” which was the entire justification for Prop. 30 in the first place, disappeared. California now has a budget surplus.

But greed being a powerful motivator, the special interests worked out a compromise that focused on extending only the income tax portion of Prop. 30 and jettisoning the sales tax. This move was politically expedient given that only the income tax portion targeted “evil” rich people while the sales tax extension would have been an almost impossible sell. (If the version of the Prop. 30 extension currently gathering signature passes, California’s highest in the nation tax rate of 13.3 percent would be extended until 2030).

In Sacramento, the normal political dichotomy is between those interests seeking to preserve what they have (i.e., businesses and taxpayers) and those interests seeking to take resources from, or impose regulations on, the former. For example, homeowners want to keep their tax dollars and thus are supportive of Proposition 13 while public sector labor interests and local governments want more of those dollars and thus loath Proposition 13 as it impedes their tax raising ability.

But the dichotomy sometimes breaks down because the line between private interests and public interests isn’t always clear. For example, California has both private and public hospitals with private institutions outnumbering the public by a factor of six. So one would think that the interests of hospitals would be more aligned with seeking lower taxes. But because hospitals get billions in public revenue for Medi-Cal, they have no problem seeking higher revenues for themselves at the expense of others.

And that is why the California Hospital Association has donated $12.5 million to the effort to extend California’s sky high income tax rate. Apparently, they remain unconcerned about the economic damage that comes from excessive taxes.

But the hospitals’ doubling down on the Prop. 30 extension may not have been well thought out. That is because they want desperately to have voters approve another measure that has already qualified for the ballot in November. Originally intended for the 2014 ballot (but they missed the deadline) this proposal requires high procedural requirements (two-thirds vote of the Legislature and voter approval) before some of the existing Medi-Cal reimbursements to hospitals can be reduced.

So the question that voters must now ask themselves is why should we support the hospital industry in its effort to protect what it currently gets from government while it is also trying to force a $6 billion to $11 billion annual tax hike on Californians?

Good question.

Jon Coupal is president of the Howard Jarvis Taxpayers Association — California’s largest grass-roots taxpayer organization dedicated to the protection of Proposition 13 and the advancement of taxpayers’ rights.

Originally published at HJTA.org. 

CA Newspaper Once Backed Obamacare; Now Warns of Failure

MedizinA prominent California newspaper that backed Obamacare is now sounding the alarm about doctor shortages.

The Contra Costa Times, which backed the Affordable Care Act in 2010, saying it “prefer[red] the current legislation over nothing,” warned in a Christmas Day editorial: “The Affordable Care Act is seen as a huge success in California because it has cut the state’s uninsured rate in half. But it will become a farce if physicians continue refusing to accept the abysmally low rates the state pays to treat the quarter of Medi-Cal patients who are not in managed care plans.”

The editorial is a response to a recently-filed civil rights complaint with the U.S. Department of Health and Human Services that alleges the Medi-Cal, the California version of Medicaid, is discriminating against Latinos. “Medi-Cal’s inadequate, extremely low reimbursement rates—in both the fee for service and managed care settings—and its failure to adequately monitor access to medical care, effectively deny the full benefits of the Medi-Cal program to the more than seven million Latino enrollees who rely on Medi-Cal for their healthcare,” the complaint alleges.

The doctor shortage was one of the consequences critics of Obamacare had predicted.

In May 2009, an op-ed in the Wall Street Journal by former Centers for Medicare and Medicaid Services (CMS) official Dr. Scott Gottlieb warned: “Expect longer waits for appointments as physicians get pinched on reimbursements.”

A CMS study released in November 2009 warned: “The additional demand for health services could be difficult to meet initially with existing health provider resources and could lead to price increases, cost-shifting, and/or changes in providers’ willingness to treat patients with low-reimbursement health coverage. ”

After the law’s passage, experts continued to warn of a worsening doctor shortage as reimbursement rates fell to keep costs down–and as fewer doctors entered primary care specialties, or stopped taking Medi-Cal patients.

In 2013, seven out of ten doctors refused…

Click here to continue reading on Breitbart.com

Daughters of Charity Deal Carries Warnings for the Future of Health Care

MedizinWhat would happen to our health care system if we took the advice of some politicians and turned it into “Medicare for all,” a single-payer plan?

Right now in California, there is a story of hospitals, nuns, hedge funds, corruption, the state Attorney General and union bosses that may hold the answer to that question.

The story begins in Paris, where the Daughters of Charity religious order was founded in 1633, dedicated to serving the poor. The Daughters came to America in the 1800s, and by 1991, their highly respected nationwide chain of nonprofit Catholic hospitals had $3.1 billion in annual net revenues and a top credit rating.

Six hospitals in California, including St. Vincent Medical Center in Los Angeles, became the Daughters of Charity Health System in 2002. By 2013 they were losing $10 million every month. Why? DCHS said three-quarters of its patients were covered by government health programs, which pay less than private insurers. The recession made it worse as more people lost their jobs and health benefits, and then the government cut back further, slashing Medi-Cal rates that reimbursed providers for low-income patient care.

DCHS also cited the “volume and mix of services” and the “employee salary/benefits structure” as causes of the financial bleeding.

The nonprofit chain put itself up for sale in 2014, hoping to find a buyer that would preserve the pensions of current and retired employees, repay debts, honor existing union contracts, and maintain services.

And they did. Prime Healthcare Services, based in Ontario, California, made an offer of $843 million to buy DCHS. But under state law, nonprofit hospitals can’t change hands without the approval of the California Attorney General.

And that gave Prime Healthcare’s longtime enemy, the Service Employees International Union and its affiliate, United Healthcare Workers West, the power to blow up the deal. In July, 2014, UHW president Dave Regan met with Prime CEO Dr. Prem Reddy and told him, according to court documents, “that he would prevent the sale unless Prime allowed UHW to unionize hospital workers at all of Prime’s hospitals.” Prime refused Regan’s demand.

The union allegedly told Attorney General Kamala Harris that if she blocked Prime’s acquisition of DCHS, they’d spend $25 million to get her elected to the U.S. Senate in 2016, and threatened that if she didn’t, they would spend the money to elect somebody else.

Harris gave conditional approval to the deal but added poison-pill requirements, including an order to run the hospitals without any changes for 10 years, which would have continued the financial meltdown. Prime walked away.

The Daughters of Charity filed a lawsuit against the SEIU-UHW in Santa Clara County Superior Court, accusing the unions of extortion and of chilling bids from other suitors by threatening to block the attorney general’s approval.

Then Prime Healthcare Services filed a lawsuit in federal court accusing Kamala Harris of corruptly abusing her power in an illegal scheme to gain financial support of her political career.

The story is told in disturbing detail in the combined 85 pages of the complaints.

Now a New York-based hedge fund, which has never run a hospital, has offered to take over the management of DCHS. BlueMountain Capital Management would pump $250 million into the nonprofit chain, take 4 percent of annual revenue as a management fee, and have an option to buy the hospitals after three years.

Harris has granted conditional approval, and BlueMountain is presently reviewing the conditions, which include providing services and charity care for ten years.

If the deal falls through again, DCHS could enter bankruptcy. Pensions could be lost and the hospitals could close, costing 7,600 jobs and depriving the communities of local health care services.

Twelve million people are now enrolled in Medi-Cal — one in three state residents — and the number could go higher. How many hospitals will go bankrupt providing legally required services for below-cost reimbursements?

Imagine what would happen if all of American health care was run that way.

It’s easy for politicians to decree that services shall be provided and fees shall be reduced. It’s even easier for them to help their friends get lucrative contracts, and to collect campaign cash as a tip for good service.

What’s not easy is persuading anyone to go to medical school or build hospitals when politicians control health care. Too bad no one has ever been cured by a hedge fund seeking a tax loss.